A dental practice cash flow forecast starts with available opening cash, adds the receipts expected each week, and subtracts the payments expected that week. Carry each closing balance into the next week and repeat across 13 weeks. The result shows when the practice may need a decision about spending, collections, or funding.
Use this direct cash view alongside the financial statements. Profit and cash answer different questions: the SEC explains that cash reporting includes operating, investing, and financing movements, with adjustments for noncash items such as depreciation. A loan receipt, principal repayment, or equipment payment belongs in the cash plan even when its accounting treatment differs from an operating expense. SEC guide to financial statements.
All numbers below are hypothetical. Have your CPA or qualified adviser review the practice's classifications, tax payments, owner compensation, restrictions, and financing assumptions.
Fix the starting point and weekly cutoff
Choose one update day and define each week's start and end. Record the forecast version and the bank-information cutoff so reviewers know which transactions are already included.
Reconcile opening available cash to the relevant accounts. Identify restricted funds and amounts unavailable for ordinary operations. Deal with outstanding checks and pending debits consistently: each payment should affect either the opening figure or a future payment row, never both.
Keep undrawn credit separate. A credit limit is not a bank deposit, and borrowing depends on the actual agreement and availability conditions. Likewise, moving money between two accounts included in the forecast does not create new practice cash.
Give the preparer access to the source records needed for the job. The SBA identifies receivables, payables, available cash, bank reconciliation, and payroll among the financial responsibilities a business must manage. Those are useful starting inputs for the forecast. SBA guidance on managing business finances.
Put receipts in the expected deposit week
Separate the receipt estimate into categories you can verify:
- patient payments expected to become available;
- insurer receipts supported by current claims and payment history;
- collections on older receivables;
- other documented receipts;
- financing or owner contributions, shown separately from operating receipts.
Use realistic collection timing from your own records. Scheduled production, submitted claims, and an insurer's explanation are not automatically money available in the bank. Document any assumption about payment processing, settlement, holds, or holidays with the responsible provider.
Avoid counting the same payment in both an existing-receivables estimate and an upcoming-visit estimate. Choose a source for each receipt group and reconcile overlaps. Flag uncertain large receipts individually so a reviewer can change their timing without rewriting the entire model.
For the first few weeks, use more transaction detail. Later weeks may rely more on documented patterns and known schedule changes. Label the basis of each estimate rather than presenting every cell as equally certain.
Schedule payments from commitments
Start with payroll funding dates, rent, supplier invoices, laboratory bills, debt payments, insurance, subscriptions, taxes, equipment commitments, and approved owner payments. Use payment dates, including advance debits, rather than spreading each monthly cost evenly across four weeks.
Check payroll carefully with the provider. Net employee payments, withheld amounts, employer taxes, and service charges must be captured once in the cash model. A gross-payroll total plus a second deduction for the same included amounts can overstate the requirement.
Connect recurring payment categories to the overhead account review, then add cash items that the operating-cost view excludes. The break-even analysis explains why covering operating costs does not settle every cash obligation.
Mark each payment as committed, estimated, or proposed. An unapproved purchase should be visible as a decision, while a contractual payment should not disappear merely because the resulting balance is uncomfortable.
Work through a complete 13-week example
Assume available opening cash of $45,000, no borrowing or owner contributions during the period, and the following total receipts and payments. Payments include all cash outflows assumed in this simplified example.
Closing cash = opening cash + receipts − payments
| Week | Receipts | Payments | Closing cash |
|---|---|---|---|
| 1 | $30,000 | $33,000 | $42,000 |
| 2 | $24,000 | $42,000 | $24,000 |
| 3 | $32,000 | $27,000 | $29,000 |
| 4 | $29,000 | $28,000 | $30,000 |
| 5 | $27,000 | $31,000 | $26,000 |
| 6 | $31,000 | $29,000 | $28,000 |
| 7 | $30,000 | $35,000 | $23,000 |
| 8 | $28,000 | $26,000 | $25,000 |
| 9 | $33,000 | $30,000 | $28,000 |
| 10 | $29,000 | $28,000 | $29,000 |
| 11 | $30,000 | $34,000 | $25,000 |
| 12 | $27,000 | $25,000 | $27,000 |
| 13 | $32,000 | $31,000 | $28,000 |
| Total | $382,000 | $399,000 | $28,000 final balance |
Check week 1: $45,000 + $30,000 − $33,000 = $42,000. Across the full period, $45,000 + $382,000 − $399,000 = $28,000. The lowest weekly closing balance is $23,000 in week 7.
Suppose this fictional owner selects a $25,000 planning floor. That is an illustrative management threshold, not an industry benchmark. Week 2 is $1,000 below it, and week 7 is $2,000 below it.
Test a delay before choosing a response
Move $12,000 of expected receipts from week 2 to week 4, leaving everything else unchanged. Week 2 now closes at $12,000 and week 3 at $17,000. Week 4 returns to the original $30,000 because the delayed receipt arrives then.
Total period receipts and final cash remain unchanged, but the temporary gap below the illustrative floor reaches $13,000. That timing problem would disappear in a report showing only the period's ending balance.
Review daily movements within tight weeks too. A Friday receipt cannot fund a debit that occurs on Tuesday. Ask what action must happen before the earliest shortfall: resolving a specific collection issue, changing an uncommitted purchase, agreeing lawful payment timing with a vendor, or arranging reviewed funding. Do not assume required payroll, taxes, or contractual payments can simply be postponed.
Evaluate any financing through the dental practice loan comparison, including costs, conditions, and repayment. Keep the unfinanced gap visible until the funding is genuinely available.
Roll the forecast forward each week
Replace the completed week with actual receipts and payments, reconcile actual closing cash, and add a new thirteenth week. Preserve the prior forecast so you can compare expectations with results.
Explain material differences as timing, amount, missing transaction, or changed assumption. An insurer payment that moved a week needs a different response from recurring receipts that are consistently overestimated. End the review with the lowest projected balance, its date, the decision required, and the person responsible for acting before that date.
